Will India Be a Two Player 5G Market with Jio and Airtel, What about Vodafone Idea?

Both Airtel and Jio have made many announcements related to 5G. Both telcos addressed the concerns of their customers and explained which kind of 5G they would launch and when they would launch it. Airtel and Jio have confirmed to launch 5G services in October 2022.

Highlights

  • India is finally shifting to 5G.
  • Vodafone Idea, the third-largest private telco in India, is not really doing or saying much lately with respect to 5G.
  • Vodafone Idea had pre-paid Rs 2700 crore to the State Bank of India (SBI) to gain the trust of the lenders.

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India is finally shifting to 5G. The spectrum auctions are over; telcos are almost ready with the infrastructure, and in October, 5G network launch is expected. But there's a big question ahead of the 5G launch - will India be primarily a two-player 5G market with Jio and Airtel? At present, there are four telecom operators in the market - Reliance Jio, Vodafone Idea (Vi), Bharti Airtel, and Bharat Sanchar Nigam Limited (BSNL). There is also MTNL (Mahanagar Telephone Nigam Limited), but it is not a PAN-India operator. Jio and Airtel are in a decent position when it comes to the 5G rollout. But Vodafone Idea, the third-largest private telco in India, is not really doing or saying much lately with respect to 5G. Let's take a look at what's the reality of the 5G launch in India.

Vodafone Idea Has Not Made Any Launch Announcements for 5G, Airtel and Jio Have

Both Airtel and Jio have made many announcements related to 5G. Both telcos addressed the concerns of their customers and explained which kind of 5G they would launch and when they would launch it. Airtel and Jio have confirmed to launch 5G services in October 2022. Jio has even listed out the four cities where its 5G SA networks would reach initially - Delhi, Kolkata, Chennai and Mumbai. While Airtel hasn't listed any names yet, we can expect the telco to target metro cities as well. In addition, Airtel and Jio have confirmed that by 2024, they will reach most of the country with their 5G networks.

On the other hand, Vodafone Idea has stayed silent about the whole thing. Vi's new CEO, Akshaya Moondra, had said that the company is in talks with several banks to arrange funding along with the vendors to procure 5G equipment. Once these two things are sorted, Vi can go ahead with the execution part and launch 5G. For now, no one knows when Vi will launch its 5G networks. The telco has not been able to raise funds for years now.

Recently, Vodafone Idea had pre-paid Rs 2700 crore to the State Bank of India (SBI) to gain the trust of the lenders. Whether that will convert into fresh funding from the banks or not is something we will have to wait and watch.

Vodafone Idea's Large Debt and Issue with the Vendors

Vi's net debt reached over Rs 1.98 lakh crore at the end of June 2022. This includes over Rs 1.6 lakh crore of deferred spectrum payment, Rs 67,270 crore worth of AGR (adjusted gross revenue) dues, and Rs 15,200 crore taken from various financial institutions. The vendors won't be too eager to offer products to Vi on credit. There are dues that Vi needs to pay to the vendors, and until that happens, Vi won't be able to procure equipment on credit from them.

As per industry sources, Vodafone Idea owes Indus Towers, ATC, Nokia, and Ericsson over Rs 6800 crore, Rs 2400 crore, Rs 3000 crore and Rs 400 crore, respectively. It is most likely that Vi won't be able to launch 5G networks at par with Airtel and Jio.

According to an ICICI Securities report released on August 5, 2022, "Aggressive deployment of 5G is dependent on VIL’s ability to raise more capital; while peers are gearing up for faster 5G deployment in India."

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Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.

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